Amazon Enters Mobile Payments, Undercuts Square
Amazon.com Inc. has launched a Square-like mobile card reader called Amazon Local Register, charging early adopters just 1.75% per swipe until the end of 2015.
Even after the promotional period expires, Amazon's rate of 2.5% per swipe still comes in lower than Square's 2.75% for swiped card payments, Amazon announced Aug. 13. Amazon's promotional rate applies to merchants who sign up by October 31, and both companies charge higher rates for manually keyed card payments.
The Amazon Local Register reader works with Apple iOS, Google Android and Amazon FireOS devices, including Amazon's new Fire phone. It can be obtained today from Amazon.com for $10 with free two-day shipping, or in stores at Staples starting August 19. Amazon's plans for a mobile card reader were earlier leaked through Staples inventory documents.
Just like Square, Amazon provides a $10 credit to merchants who purchase the card reader, covering the cost of the hardware. Amazon enables merchants to spend money from transactions on Amazon.com within minutes, or to receive the funds in a bank account within one business day. The Local Register app also provides business tracking tools.
Local Register is the latest of Amazon's many payments offerings, which are typically focused on e-commerce. Amazon recently released a beta version of a mobile wallet, and late last year introduced a service called Login and Pay with Amazon, which lets consumers use their Amazon credentials to make purchases at other merchant sites.
Square is working to build additional revenue sources beyond its core payments offering. Its most recent additions include an appointment-scheduling service, small-business lending and interactive receipts. Square also plans a chip-and-signature version of its card reader for 2015.